Angell v. Van Schaick — 30 N.Y. St. Rep. 714

Majority

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Cyrus D. Angell, App’lt, v. William Van Schaick et al., Resp’ts.

(Supreme Court, General Term, Fifth Department,

Filed April 11, 1890.)

Headnote

1. Brokers—Commissions—Law op foreign state.

In an action by a Pennsylvania broker for commissions on a sale of real estate in that state, the answer set up a statute of that state requiring real estate brokers to take out a license, and in default of doing so imposing a penalty of $500 to be recovered by action, and alleged that the highest court of that state had decided, in a proper case, that a broker could not recover commissions who had not taken out a license. On demurrer, Held, that in the absence of an averment that plaintiff's omission to take out a license was done with intent to evade the laws of Pennsylvania, this answer was insufficient.

3. Same.

A mere repugnancy to a statute designed apparently alone to raise revenue in another state is not sufficient to prevent a recovery for compensation in this state under a contract made in the foreign jurisdiction.

3. Pleading—Demurrer.

In interposing a demurrer a party does not admit the averments of construction put upon statutes by the pleading demurred to, or the correctness of inferences stated therein, but only the truth of such facts as are properly stated.

(Corlett, J., dissents.)

Appeal from a judgment entered in Cattaraugus county upon tke decision of the special term, overruling the plaintiff’s demurrer to the second defense set up in the answer.

William H. Henderson, for app’lt; M D. Norihrup, for resp’ts.

The plaintiff, who describes himself in the complaint as a real estate broker having his office at Bradford, Pennsylvania, brings this action to recover of the defendants, who " are residents of this state, the sum of $500, as the agreed price for his services in procuring for them a person who was willing

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and able to, and who in fact actually did, enter into a contract for the purchase of lands of the defendants, in the year 1886, in Mc-Kean county, in the state of Pennsylvania, for the sum of $30,000.

The second defense, which is demurred to on the ground that it is insufficient in law to constitute a defense to the cause of action set forth in the complaint, alleges the existence at the time of making of the contract of certain statutes in the state of Pennsylvania, whereby it was made incumbent upon all real estate brokers to pay into the treasury of the county the sum of thirty dollars as a license fee for doing the business of real estate brokerage. In default of procuring a license a penalty of $500 was imposed upon any person who should engage therein, to be recovered in an action at law, as debts are, one-half going to the people and the other half to the guardians of the poor.

The learned counsel for the respondent asserts that these statutes made the failure to take out a license for this business an offense. If it is meant thereby to state that such violation was punishable as a crime, the statement is erroneous. A penalty of $500 to be recovered in an action at law, as debts are, is prescribed for each offense, it is true, but the term “each offense,” in that connection, does not mean a crime, but only an omission or failure of duty year by year.

It is also contended by the respondent’s counsel, that by the law of Pennsylvania the plaintiff would be unable to recover in that state his commissions or any compensation for such services under the statutes above mentioned.- There is not, however, in the answer any averment that there is a law of Pennsylvania which would lead to this result. It is stated in this defense that the highest court of that state has decided, “in a proper case” before it, that a person cannot recover commissions as a real estate broker who has not taken out a license. This is not by any means an assertion that by the law of Pennsylvania such a recovery cannot be had The decision of the highest court of that state would indeed be a means, but only one of many means, of ascertaining the law of that commonwealth, and, standing alone, could not be deemed to be the law governing all cases which might arise where a recovery of commissions is sought, in the absence, as in this case, of averments of the particular circumstances attending the case where such decision was given. The construction put upon the statutes of another state by its courts are ordinarily controlling. Jessup v. Carnegie, 80 N. Y., 441 ; Faulkner v. Hart, 82 id., 413; Leonard v. Columbia Steam Nav. Co., 84 id., 48.

But the defense here set up fails to allege that in all cases where there was no license there could be no recovery. The leading case in the courts of Pennsylvania (which is not before us as evidence, but only as an authority), is Holt v. Green, 73 Pa. St., 198 . This was followed by the case of Johnson v. Hulings, 103 id., 498. The learned judge writing the opinion of the court in the last named case, and who deems that court bound by the decision of Holt v. Green, supra, characterizes the omission of the broker to take out a license as immoral. This characterization would not be war

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ranted if the case before the court had been one only of an unintentional or accidental omission to pay the license fee. The report of the decision does riot satisfactorily show that the act of the party was willful; but the remark of the learned judge leads quite directly to the inference that the omission of the party was for the purpose of evading and defeating the law. In order to understand the full meaning of this remark, and to allow it all the force which it is justly entitled to, it is necessary to see what the case was in which it was made; but the facts constituting that case are not before us. This observation of the judge, in giving judgment, may have been perfectly correct in reference to the case then before the court, and yet be clearly wrong when attempted to be applied to a case of a different character, where obviously there is no moral turpitude. If anything further than this be claimed for the decision of the supreme court of Pennsylvania upon this subject, we are precluded from adopting it on this appeal, and from administering the rule in accordance with the lex loci contractus, on account of the insufficiency of the pleading demurred to.

Yet the learned judge at special term, his opinion has fallen into the error of supposing that, in the allegation, that there had been one decision, in a case brought by a real estate broker who had not taken out a license, made by the highest court of the state of Pennsylvania, would establish a common law rule of that state, for, he says, “that it is the law of that state, and was at the time of rendering these services, and was so declared by the highest judicial tribunal of that state, that a person cannot recover for services rendered in that state as a real estate broker, unless he had at the time such a license.”

I do not find in the answer any other averment of the existence of a common law, growing out of (so to speak), the interpretation of these statutes, other than the allegation that the highest court of ultimate and appellate jurisdiction of Pennsylvania, “ in a proper case ” brought before it for review, has decided and still holds, that a real estate broker not having such commission, or not having paid the license fee, can recover no compensation for his services. Whether the facts before the supreme court of Pennsylvania were similar to those appearing in these pleadings, is not set up by the answer. If it appeared that the real estate broker in the case cited failed to take out the license or pay the fee with the intent to evade the laws of Pennsylvania (which may be the meaning of the pleader’s expression, “a proper case”), a sufficient case would be made out for the defeat of a claim in that forum as well as in our own. There is not in this case any averment in the answer that the omission of the plaintiff to take out a license was done with intent to evade and violate the laws of Pennsylvania. In the absence of such averment, this answer is insufficient as a defense. This brings me to the principal defect and omission contained in this answer, and that is, the failure on the part of the pleader to show that the contract set forth in the complaint is a criminal offense, or that it is null and void or is prohibited by the statute of that state. So far as is disclosed by this pleading, the purpose of the statutes mentioned is to secure certain reve

Dissent

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nues to the state, and the only penalty imposed for the failure to pay for licenses to conduct such business is liability to a civil suit and damages as for a debt fixed by the statute. In Thalimer v. Brinkerhoff, 20 Johns., 397 , the general rule is laid down, that all contracts which have for their object anything repugnant to the general policy of the law or contrary to the provisions of the statute, are void. Ex turpi contractu actio non oritur; but a mere repugnancy to the statute designed apparently alone to raise revenue in another state is not sufficient to prevent a recovery for such compensation in this state, under a contract made in a foreign jurisdiction.

We have not been cited to any decision, either by counsel, or by the learned judge at special term in his opinion, by which a contract, valid in this jurisdiction, should be declared by our own courts invalid by reason of the laws of another state where the ■contract was made, unless it appeared, either that the entering into of the contract was a crime or that the same was prohibited altogether, or was declared null and void by the foreign statute.

Section 6 of the act passed by the legislature of Pennsylvania, May 27, 1841, set forth in the complaint, the provisions of which were subsequently extended to real estate brokers, is not a prohibition with a punishment to be inflicted by the criminal courts for its violation. On the contrary it creates a debt to be recovered in an action at law against the person failing to pay the license fee. The failure so to take out a license is not shown to be either a felony or a misdemeanor, or in any way punishable. So long as the broker pays thirty dollars per year for his license, or $500 per year without it, he can continue his vocation.

After setting forth the foreign statutes, and averring that they were the whole of the laws and statutes of Pennsylvania relating to the subject, the pleader alleges that by such statutes the plaintiff was absolutely prohibited from exercising his trade without a license, and that he was prohibited by such statutes from recovering in this action. But these averments are mere inferences and deductions drawn from the statutes, and are not in any sense allegations of fact. In interposing the demurrer, the plaintiff did not thereby admit the construction put upon the statutes by the pleading demurred to, or the correctness of inferences, but only the truth of such facts as were properly stated in the answer. Bogardus v. N. Y. Life Ins. Co., 101 N. Y., 337 ; Bonnell v. Griswold, 68 id., 294; Buffalo Catholic Institute v. Bitter, 87 id., 250.

As a question of pleading, therefore, it appeal’s that the answer is insufficient, in law, to prevent a recovery by the plaintiff. The-plaintiff should be required to stand upon the first defense, namely, a general denial of the allegations of the complaint.-

The judgment appealed from should be reversed, and the demurrer sustained, with costs.

Dwight, P. J., concurs.

(dissenting).—The complaint shows this action was brought in October, 1886, to recover $500 and interest as ■commissions for the sale of 135 acres of land in McKean county,

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Pennsylvania, upon which there were producing oil wells. The defendant’s first answer is a denial. The second admits the employment of the plaintiff by the defendants, the sale of land and the amount of commissions. , It then alleges the existence of certain statutes in Pennsylvania which are set out in the answer, which enact in substance that a broker for the sale of property, including real estate, must pay a certain sum for a license to carry on his business, and take out a commission.

Section 6 provides in substance that no individual or partnership, other than those duly commissioned, under the provisions of the act, shall carry on the business of broker under a penalty of $500 for each and every offence, to be recovered, etc.

The answer alleges, in substance, that the plaintiff paid no-license and bad received no commission authorizing him to sell real estate as a broker. It also alleges that the statutes quoted are all the laws and statutes of the slate of Pennsylvania on that subject. It then proceeds as follows, “and the highest court of ultimate and appellate jurisdiction of said state of Pennsylvania, in a proper case brought before it for review, has decided and stiil holds that a real estate broker not having such commission, or not having paid or caused to be paid into the treasury of the proper county the sum of money required by said laws and statutes to procure the same, cannot recover compensation or commissions for his services as such real estate agent or broker.”

The learned counsel for the appellant criticizes the words, “ in a proper case,” and claims that the facts alleged do not show a jDroper case. The whole quotation conveys the impression and clearly implies that the facts were such as required the appellate court to construe the statutes quoted in the answer; for it cannot be assumed that that tribunal adjudged and determined that a real estate broker could not recover compensation for commissions, unless the facts before it were such as to require a determination of that question.

The answer demurred to then proceeds, “that by the laws and statutes of the state of Pennsylvania, the plaintiff was absolutely prohibited from using or exercising the business or occupation of a real estate broker within the state of Pensylvania, under a penalty of $500 at and during all the times and periods of time mentioned in said complaint; and was also thereby prohibited from recovering in an action any compensation or commissions for his alleged services as a real estate broker, alleged in said complaint.”

The learned counsel for the appellant characterizes the last quotation as the opinion of the pleader, and claims that the facts are not properly stated. The answer had already set out the statutes, the decision of the supreme court, and then alleges that by the laws and statutes of Pennsylvania the plaintiff could not recover commissions on account of the matter alleged in the complaint.

In Marie v. Garrison, 83 N. Y., 14 , it was held that to sustain a demurrer to a pleading it is not sufficient that facts are improperly or informally averred, or that it lacks definiteness and precision, or that the material facts are argumentatively averred; it

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will be deemed to allege what can, by reasonable and fair intendment, be implied from the allegation.

So in Lorillard v. Clyde et al., 86 N. Y., 384 , it was held that ■on demurrer all reasonable intendments will be indulged in in .support of the pleading demurred to. The remedy for indefiniteness or uncertainty in a pleading is by motion, not by demurrer.

Applying the rule in the above cases, which is nowhere questioned, to the averments in the answer demurred to, it is difficult to see how the pleading can be other than sufficient. It is somewhat verbose, contains repetitions in some of its statements, is argumentative, and lacks precision and exact definiteness in some of its statements, but in substance and effect it distinctly alleges all the facts necessary to constitute a perfect defense.

In Blackwell v. Webster, 29 Federal Rep., 614, the contract was made in the state of Maine. One of the parties was living in Hew York, where the trial was had. The court held that the validity of the contract must be determined by the laws of Maine and that the effect of the Maine statute was to render the agreement void. The same doctrine was recognized in Coppell v. Hall, 7 Wall., 549 ; Hyde v. Goodnow, 3 N. Y., 269 ; Backman v. Jencks, Barb., 468.

In the case at bar the complaint and answer show that the contract was made in Pennsylvania, was executed there by a broker living and doing business in that state, and that under the laws of that state the plaintiff could not recover the commissions. It is entirely clear that there was no defect of the answer that could be reached by demurrer.

The interlocutory judgment was right and should be affirmed.

Judgment reversed and demurrer sustained, with costs.